Pricing Your Home
Pricing your home strategically is the best way to make sure that you meet your goals when selling your home.
We’ll provide you with a pricing recommendation to help guide your decision.
Comparative Market Analysis
When pricing a property, the biggest factor to consider is how similar properties in your area have sold recently. We do this by running a Comparative Market Analysis (CMA), which looks at homes that have sold in the past six months. This gives us a good idea of the market value of the property.
It is important to price with the CMA in mind for two reasons:
- When buyers are drafting their offers, their agent will run a similar search to make sure they are offering a fair price for the property.
- If the buyer is securing financing, their lender will require the property to be appraised to ensure it is not overpriced. The appraiser will leverage the CMA to ensure that the buyer is paying a fair price. If your property does not appraise at an acceptable value, there are a few options available – more on that under “Additional Listing Considerations”.
Selecting Comps
When selecting comparable properties (comps) for your CMA, your agent will look at homes that are close in proximity & have a similar footprint and amenities.
Making a Recommendation
Your agent will provide their recommendation as a range. The lower-end number is meant to be the more aggressive price, whereas the higher-end number is more of a “test-the-market” price. When you price your home below market value, you are increasing your chances of being perceived as a hot property, as outlined below:
- Above fair market value: Buyer pool & agents notice the home, but no showings & no offers
- At fair market value: Some showings & maybe one offer below asking price
- Below fair market value: Many showings/offers & home is perceived as a hot property
Frequently Asked Questions
Shouldn’t we price my home above fair market value to leave room for negotiating?
The majority of buyers pay fair market value for their homes. By pricing it right from the start, you are attracting the largest amount of buyers possible and increasing your chances of selling at or above your listing price.
When is the best time to sell?
Typically, the hottest time for sellers is the “spring market.” This stretches from early February until late May. Many buyers have leases ending during this time or in early summer, so it leads to a lot of buyer activity. That said, you may not always be able to sell during the spring market, and that is totally okay! You need to list your home when it makes sense for you. Plus, every year is a little bit different – fluctuating interest rates, political environments, and more all have a definite impact on the market.
How is commission paid?
Commission for both the buyer’s agent and seller’s agent is traditionally paid by the seller. At the closing, both brokerages are paid, and then both agents (buyer’s agent and seller’s agent) receive a portion from their respective brokerages. You may recall that this was the case when you purchased your property.
I’ve heard “your first offer is your best offer.” Is this true?
Usually, yes. This is because the longer a home sits on the market, the more motivated the seller looks to the buyer pool. When we represent buyers, we coach them accordingly — we will always negotiate more when the market time is more than a few weeks on MLS. You’ll get the most attention & eyes on your home during the first few days on market.
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